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According to a Google Temasek study, e-Commerce sales are slated to hit US$88 billion in the next 8 years. The entry of Amazon and Alibaba in the Southeast Asian e-marketplace is further proof of the e-Commerce potential in this region. While this provides plenty of opportunities for businesses to grow – there’s also more competition than ever. Launching a successful e-Commerce venture takes more than connecting a valuable product or service with the right audience. This white paper outlines key principles and strategies to help you ride this wave and come out on top.
SURF YOUR WAY
According to a Google Temasek study, e-Commerce sales
are slated to hit US$88 billion in the next 8 years. The entry
of Amazon and Alibaba in the Southeast Asian e-marketplace
is further proof of the e-Commerce potential in this region.
While this provides plenty of opportunities for businesses to
grow – there’s also more competition than ever. Launching a
successful e-Commerce venture takes more than connecting a
valuable product or service with the right audience. This white
paper outlines key principles and strategies to help you ride this
wave and come out on top.
The 4 drivers of e-Commerce in Southeast Asia.
Proliferation of users of mobile devices – Internet and
network access have expanded at an inexorable pace
– currently about 53% of the region’s population or
339.2 million people have internet access. This figure is
predicted to double by 2025. This tremendous growth
of mobile users means the acceleration of e-Commerce
sales will be exponential – and explosive.
Delivery infrastructure, redefined – The growth of
online marketplaces has brought many opportunities to
transportation and logistics companies in integrated areas
of freight, customs management, warehousing, fulfilment
and last mile delivery. These companies are reinventing
themselves to stay relevant and competitive as the
sophisticated demands of e-Commerce rapidly evolve.
Creation of a new digital payment ecosystem – From credit
cards to e-wallets, e-cash to mobile payments, money is
making the world go around in ways like never before.
Through the advances of technology and enhanced web
security, these new electronic payment systems have been
developed to facilitate and improve e-payment transactions.
Huge investments by e-Commerce giants – China’s
e-Commerce leader Alibaba ramped up its presence in
Southeast Asia when it upped their controlling stake to
83% in Lazada for $1bn. JD.com bolstered its expansion
into Southeast Asia in a $500 million JV in e-Commerce
and fintech with Thailand’s top retailer, Central Group.
Amazon has also thrown its hat in the ring by launching its
Prime Now service in Singapore in July 2017. These are
unmistakable signs of massive things to come.
THE GROWTH - EXPONENTIAL.
THE DRIVING FORCES - UNSTOPPABLE.
WHYIS E-COMMERCE IMPORTANTTO
THE SURVIVAL OFYOUR BRAND
In the realm of e-Commerce, will your business fit in?
While it’s a fact that the current global share of e-Commerce in most
FMCG categories is low, a majority of consumers today are open to
shopping in a virtual market.
As e-retailers improve their offerings and expand into more product
categories, more brands are making their products more accessible on
these platforms. This encourages more consumers to try out shopping
on the internet. As e-commerce grows, brands with an established
online presence will get the first mover advantage and stand to profit from
a larger share of online shoppers.
Brands which choose to ignore the advances of online channels ignore
it at the peril of losing customers to first movers.
Create a new e-Commerce experience in
01 Assess Opportunity and Model Mix
02 Understanding your consumers in their
03 Don’t think of e-Commerce as simply ‘The cart’
04 Don’t let your offline distributors manage your
05 Understanding consumer intent
06 Knowing what differentiates your digital shelf
07 E-commerce is not just another channel - brands
need a new team structure and partners to manage it
08 The power of social media as a demand channel
09 Time to think beyond the first purchase
10 Never settle: test, learn and optimise
• OWNED PLATFORM
Brands can launch their owned and operated e-store on their brand dot coms like
Apple.com and dolce-gusto.com
You control your online retail platform. The advantages are obvious: you
enjoy greater visibility of your own data; Media Attribution is easier due to
end-to-end ownership of the eco-system and you control your branding and
However, the disadvantages are just as apparent: there are high setup
costs coupled with high media costs needed to create awareness and to
drive traffic to the store; costly resources are needed to develop skills for
end-to-end management and there are additional processes for first time
shoppers and more often than not, these extra steps trip up consumers
leading to high drop-off rates.
Finally, owners need to invest heavily in establishing credibility as an
• PRESENCE ON E-RETAILERS
Brands can list themselves on e-retailers like Amazon
One advantage with this model is that e-retailers like Amazon get a large
quantity of organic traffic. They also invest extensively on performance
media to create awareness and to drive traffic to their e-stores. The setup
cost for brands on e-retailers is low, since the e-retailer has an established
presence, fine-tuned and user-friendly processes. Since the e-retailer takes
care of the fulfilment, the brand doesn’t need to learn new skills in this area.
However, brands do face the disadvantages of having little control over the
look, feel and pricing on e-retailers, while being charged high commissions
for the service.
• PRESENCE ON MARKETPLACE PLATFORMS
Brands can set up their shops on marketplace platforms like Lazada and T-mall
The advantages here are similar to those for e-retailers. Platforms like
Lazada and T-mall enjoy a large share of organic traffic, an optimised and
user-friendly checkout process for shoppers. Additionally, since brands
set up their own stores, they have control over the look and feel and also the
pricing on the brand page.
Also, as some websites wish to minimise tracking pixels for fear of affecting
the user experience on their site, media attribution can be problematic.
AND MODEL MIX
The same consumer on different shopping missions might take different routes to arrive at the point
of purchase. Depending on the product category, the occasion, mindset or need, the consumer journey
could involve webrooming, showrooming or a complex cross channel OtoOtoO process.
UNDERSTANDING YOUR CONSUMERS
IN THEIR SHOPPING MISSION
Browse In-store Browse Online
Buy Online Buy In-store
– see it, touch it in-store, buy it online
Essentially, in Showrooming, local
stores become showrooms for
online shoppers. Here, a shopper
walks into a store and checks out
a product. They hold it, feel it, try it.
Then they walk out, go home and
promptly purchase the product
online. This occurs because of the
simple need to see and touch the
merchandise. Significantly, many
of these products are available at
lower prices through online vendors.
According to Google Consumer
Barometer survey, home furnishings
is a category where 20% of
Singaporeans use showrooming.
– see it, know it online, buy it in-store
Webrooming is a reverse behaviour
to showrooming. Here, consumers
trawl online for product information
and price comparisons. Then
they walk into the store for a final
evaluation and make the purchase.
A perfect case in point is the mobile
phones market. In 2015, 54% of
buyers in Singapore completed
their phone purchase offline after
researching, exploring and making
their choices online.
MOBILE ENABLED CROSS-
– seamless OtoOtoO
Mobile devices have enabled
shoppers to embark on complex yet
integrated OtoOtoO journeys to fulfil
their shopping missions. They might
be checking prices of products or
even making the purchase online on
their mobiles whilst being present
in a brick-and-mortar store.
In such a scenario, it is extremely
important for brands to take an
omni-channel approach to retail.
RESEARCH AND PURCHASE BEHAVIOUR BY CATEGORY
• Reviews and
• Value proposition
• Product Mix
• Supply chain Process
• On and off platform search
For a purchase to be holistically successful and to fully meet a customer’s expectations, multiple
activities need to happen before and after the purchase. And they happen like a chain reaction:
DON’T THINK OF E-COMMERCE AS
SIMPLY ‘THE CART’
For the consumer to want to put the product in the cart, they first need to know that your brand
is available online. You will need to employ the vastness of the digital marketing ecosystem
to lead them to your e-Commerce store. Micro-targeting on search, social and display is one
cost-effective way to achieve this.
Once the shoppers are in the e-store, they need to be able to find your products quickly and
easily. Appropriate search engine marketing on-and-off the platform can be utilised to guide the
consumers to the product. Competent search engine optimisation will ensure that the product
listing stays on top in the search engine and on platform product search results page organically.
Now that they are on the brand page, it’s essential to ensure that the product mix meets the
customer’s expectations with an attractive value proposition. The content on the page needs
to engage and enrich the shopper with value-added shopping experiences. The content must
appear credible in every way so that consumers are assured they are buying a quality product
Once the consumer has added the product to the cart, the brand needs to ensure that it is
delivered to the consumer in pristine condition and in timely fashion.
Online feedback is an increasingly important way to add credibility to any e-Commerce business.
As such, the brand not only needs to ensure that shoppers have a good experience the first time
and thus will return,but also that they leave favourable reviews and ratings for other consumers
to view and consider. An excellent CRM program has been proven to help the brand maintain a
good relationship with the customer and increase their lifetime value.
• Digital marketing ecosystem
• Social Commerce
In the offline supply chain, distributors have the logistic and transportation expertise in managing
physical distribution as well as driving sales through offline sales channels.
The conventional offline model for distribution has been perfected over decades. There is little need
or cause for innovation for distributors and so they focus on the repeated executions of a set of
Standard Operating Procedures. However, e-Commerce has a constant need to transform and test
different models. Logistics and transportation providers, therefore, should innovate in tandem with
the expansion of e-Commerce with an ever-shifting curve of testing and learning. In essence, there
needs to be a paradigm shift in mindset.
For distributors that manage both online and offline presence for brands, their main priority is current
B2B customers like FairPrice and Cold Storage. This is due to the high order value as compared
to online consumers who purchase in smaller quantities. Assigning lower priority to e-Commerce
could prove fatal to these brands as shoppers will experience poor service which in turn will result in
instant and highly visible negative public feedback on social media. Hence, the brand needs a service
partner whose utmost priority and passion is in e-Commerce.
The rise of e-Commerce has led to the emergence of a new role in brand teams – that of the online
store manager.While the distributors’ main role in the offline value chain is to ensure stock availability
and shelf visibility, managers of online stores need to go beyond into content marketing, performance
media, customer experience and marketing analytics.
We strongly recommend that brands engage with a partner who has the new skills required and also
the mindset to innovate in the constantly evolving ecosystem.
DON’T LET YOUR OFFLINE
DISTRIBUTORS MANAGE YOUR
Since the consumer now starts their product search by
using product pages and reviews to compare products, the
product page has become an important tool for brands to
initiate the shopping experience and, hence, a relationship.
Here, the brand can declare its product differentiation,
stamp its credibility and address any queries from
consumers. In short, product page content is now king.
A RECENT STUDYBYE-COMMERCE CONSULTANCY
BLOOMREACH REVEALED THAT IN THE US, ONLY
28% OF CONSUMERS BEGIN THEIR PRODUCT
SEARCH ON SEARCH ENGINES. WHEREAS 55%
BEGIN THEIR SEARCH ON AMAZON AND THE REST
ON OTHER E-COMMERCE WEBSITES.
UNDERSTANDING CONSUMER INTENT5.
When brands understand the intent behind a customer’s
search in Google or an e-Commerce platform’s search
engine, they can then develop appropriate content that
will direct customers to their pages. This is why Search
Engine Marketing and Search Engine Optimisation are two
of the most important tools in any brand’s quest to make
itself highly visible and easy to locate.
When brands are clear about their e-store’s value proposition, they tend to be more successful on
e-Commerce. It makes it easier for the consumer to buy your brand from your store over another brand
or your own product from your offline presence. Online stores not only have to compete with other
brands but also their online and offline presence through product and experience differentiation.
Product differentiation can take the form of selection and price – The brand can offer a wider selection
online and this can be a differentiator. Since e-Commerce can have a lower cost structure than offline,
the brands can also offer lower prices. In addition, it can stand apart from others by holding exclusive
promotions, value-added offers and special deals.
KNOWING WHAT DIFFERENTIATES
YOUR DIGITAL SHELF
Content that adds value to the consumer
journey’s in the brand e-store can enrich
Credibility is crucial for an official store
when its categories face the onslaught
Convenience at any level is key to many
consumers of e-Commerce. For example,
a store can differentiate itself by being
the only one to offer COD with same day
or next day delivery.
EXPERIENCE DIFFERENTIATION CAN HAPPEN IN THE 3CS –
CONTENT, CREDIBILITY AND CONVENIENCE.
Brands need to relook its relationship with its customers – In many ways, Marketplaces like Lazada
and T-Mall, can be seen as similar to a mall with the company’s presence functioning as a storefront.
Given this scenario, the brand now has an obligation to start behaving like a retailer and build a direct
relationship with the consumer. Along with sales channel management skills, the e-Commerce team
also needs knowledge and management of performance marketing, customer experience, marketing
analytics, fulfilment, driving repeat purchases, warehousing and final mile delivery.
It is now crucial for the teams at the Sales, Marketing and Supply Chain to step out of their silos
and work as one holistic whole. These 3 traditionally separate functions are now interconnected for
e-Commerce. With granular data being generated, it is clear to see how actions in media directly affect
sales, or how delivery glitches can tarnish store and product ratings and sully shoppers’ experience.
E-Commerce requires deep and smooth collaboration between sales, marketing and supply chain.
Products and service ratings and reviews which are crucial to the store’s credibility and reputation are
directly affected by delivery flaws. It is highly important that shoppers have a delightful experience
through the fulfilment process to ensure favourable ratings.
Of course, it is important to point out that legacy supply chain systems at FMCG companies are geared
to servicing larger businesses like grocery chains and pharmacies. They are not designed to servicing
consumers directly, which involves smaller quantities in much greater transaction volume. Obviously
legacy systems will face complications in dealing with the volume of transactions and brands need to
be prepared to manage this change.
Getting free delivery is one of the most considered factors affecting online purchasing decisions. Invariably
in each of the market inThailand,Malaysia,Philippines,Vietnam,Indonesia and Singapore,more than half of
the audience stated that free delivery service is the one factor to clinch their purchasing decision.So,while it
makes business sense for brands to minimise delivery costs, it is paramount that they are uncompromising
when it comes to service quality. And that should include free delivery.
WHEN SHOPPING ONLINE, WHICH OF THESE FEATURES WOULD MOST
INCREASE YOUR LIKELIHOOD OF BUYING A PRODUCT?
A. HYPERTARGETING AND ITS VALUE TO BRANDS
Hypertargeting lets you drill down much further in hitting the mother lode of your target audience.
With hypertargeting, customised messages get delivered to a very defined and niche audience across
various advertising mediums. Brands can reach their targeted customers by leveraging on audience
segment data and advanced technologies. It all begins with defining and fully understanding exactly
who your target audience is. This includes tangible attributes of your audience, such as age, gender and
location; and intangible attributes that may include hobbies, interests, beliefs and sentiments.
Consider this: Facebook has 35 main targeting criteria, with thousands of categories and subcategories.
Twitter has 30 categories, LinkedIn 16 and Snapchat 5; all of them with plenty subcategories and
Whatever target you’re after, in most cases it’s easier to find them on Facebook than on even the most
sophisticated internal databases that companies have built over the years.
Social platforms let you have the twin advantage of precision and scale. So even if you have very
narrow targets, chances are you will still end up with a significant audience.
By matching owned database of customers’ email addresses or phone numbers to the network’s
audience, brands can deliver posts only to the people in their database. Called ‘custom audiences’, this
gives brands the ability to send different messages to customers and prospects.
Because of the ‘lookalike technology’ available on social platforms such as Facebook, Instagram,
LinkedIn, Snapchat, Twitter and Pinterest, you can identify your core audience and then expand it to
other similar people. Finding your customer’s ‘twin’ has always been the key to marketing nirvana.
Now, thanks to the unparalleled richness of social databases, brands can do exactly that. This allows
brands to scale up very quickly while maintaining their core audience.
THE POWER OF SOCIAL MEDIA AS A
THESE DAYS, BRANDS HAVE MANY POWERFUL REASONS TO BECOME EXCITED
ABOUT THE POTENTIAL SOCIAL PLATFORMS BRING TO E-COMMERCE – HERE
ARE FOUR OF THEM.
C. REAL-TIME FEEDBACK
Good communication has always been about the testing of new ideas, new formats, new audiences.
On Facebook, you can set up test cells and get real-time results on the performance of each cell. This
allows us to optimise brands’ audiences, formats, offers and creative executions instantly. Which is
why when we execute CRM campaigns on Facebook or Instagram, the real work starts right after the
D. OMNI-CHANNEL – TRUE MEDIA INTEGRATION
Studies have shown that people spend an average of 3 hours per day on mobile and that 62% of mobile
users check their phone 30 times a day. This means that shoppers in their consumer journey now
experience more touch points than ever before.
It is inevitable that social platforms will continue to innovate, not just with revolutionary targeting
techniques but also with fresh formats. This will unleash the creative powers of CRM, social and media
specialists. We are able to target individuals and offer up highly personalized digital experiences like
360° videos, video carousel, or richer formats like Canvas.
Consider the possibilities created by the leading players of social media coming together to enrich
our e-Commerce experiences – Instagram and WhatsApp are integrating with Facebook to provide a
constant flow of additional data points and multiplying the targeting options available. And already a
reality is the Addressable TV, a marketer’s dream tool. Imagine using Facebook’s current targeting
criteria for TV. Yes, it will be laser sharp targeting based on the TV viewers’ demographics, location, age
and ethnicity. More importantly, e-Commerce marketers will now create messages that will resonate
with consumers, rather than irritate.
Brands should cherish and treasure loyal customers. Admittedly, brands spend a lot of money in the
‘know’ and ‘find’ stages to acquire new customers. But a loyal consumer who has fulfilling experiences
doesn’t need much persuasion to ‘repeat’ purchases.This amounts to significant savings on acquisition
costs. So, loyal consumers are much more profitable for the brand than acquiring new consumers.
CRM programs benefit brands with retention. An excellent CRM program is one which periodically
reminds consumers about the brand and its constantly improving offers. And it will increase
considerably the lifetime customer value of a shopper.
Use of social media for CRM outreach. A collaborative approach that focuses on retaining customers,
growing their value and increasing their advocacy. It is a customer-centric approach that leverages
on the full capabilities of today’s social media platforms. It all starts with an insightful understanding
of the customers’ needs and uses meaningful content and highly targeted amplification to engage not
only in conversations, but also to increase conversions and customer value.
TIME TO THINK BEYOND
THE FIRST PURCHASE
A big aspect of running a successful
e-Commerce operation is testing, learning and
optimise. Any marketer who is serious and
passionate about her business should be in a
constant state of learning. Even if a channel is
performing up to expectations, there should
still be investments to always optimise.
Real-time data provides us the ability to test.
In the offline world, optimisation is a waiting
game. Brands received behavioural data
after a long-time lag which could range from
weeks to months. In the online world, data is
available real-time. Hence, optimisation can
also be done real time. If your agency partner
is unable to lead you on this, your business will
face many drawbacks in e-Commerce.
Cheaper to test now. Traditionally, FMCG companies followed the FTR (First Time Right) principle
for launches because in the offline world, a mistake is one mistake too many and can be costly.
Companies planned extensively for months before releasing a product into the market. However,
in the online world, speed is vital. Here, companies limit the cost of a potential mistake by testing a
new concept to a small, selective audience. Hence, brands should ensure their presence online and
test at the earliest possible. At same time, they can regularly implement optimisation. In this way,
they can correct all the kinks in the system as they continue their operations.
High number of unknown variables in e-Commerce. E-Commerce thrives on change and this is
what makes its future so immensely exciting. And whilst the offline model has been perfected
through decades of learning, the online model is nascent with a wide range of variables and will
need constant innovation over a prolonged period to even come close to a perfect model. What
might have worked in a certain market for a certain category at a certain earlier time may or may
not work for your brand today. In such a case, it is imperative that the brand be nimble and test as
many variables as possible. Such AB testing should be carried out regularly. After all, every test is
one step closer to achieving the perfect model for your brand and helping your business surf the
NEVER SETTLE: TEST, LEARN
Lucy McCabe, President, OgilvyRED Asia Pacific
Hemanth Magal, Vice President, E-Commerce, OgilvyRED Asia Pacific
OGILVY E-PARTNER SERVICES
Our E-Partner Services offers end-to-end management of marketplaces on key e-Commerce platforms.
We work with brands on their high-level strategy to develop an effective e-Commerce ecosystem,
concrete value proposition and tactical pricing and promotion strategies. Moreover, our services also
encompass designing stores, creating engaging content, and the day-to-day running of store operations
that includes media planning and buying, analytics, and optimisation.
1. Google Temasek Study, 2016
2. Nielsen Future of Grocery Report, 2015
3. Shopify, 2016
4. Global Web Index, 2017
5. Consumer Barometer Survey 2014/2015
6. Reuters.com - Business News, 28 June 2017
7. Reuters.com - #Technology News, 15 September 2017
STRATEGY DEMAND PROMOTIONS CONTENT IMPLEMENT
Store Set Up
Promotions Set Up
Test And Learn